The Wharf (Holdings) outbid nine developers to win a residential site designated for luxury development in Kowloon Tong for HK$28,531 (US$3,646) per square foot, a new record for Kowloon.
The Lands Department awarded the parcel of land to the highest bidder, Alpha Pioneer, a wholly owned subsidiary of Wharf, for HK$12.45 billion on Tuesday.
Wheelock Properties, the development arm of Wharf’s parent Wheelock & Co, will be responsible for developing the parcel of land near Beacon Hill, traditionally a luxury residential area, according to a company statement.
Stewart Leung, chairman of Wheelock Properties, said the site would be developed into large units, probably in the region of 2,000 square feet.
Property consultants expect the group’s experience at the exclusive Mount Nicholson project on the Peak – which boasts Asia’s three most expensive apartments – will set a new standard for deluxe homes in Kowloon Tong.
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“It will be the Kowloon version of Mount Nicholson,” said Vincent Cheung, deputy managing director for Asia valuations and advisory services at Colliers International.
“The site will comprise houses and mid- to high-rise flats. Prices for the houses could be HK$80,000 to HK$100,000 per square foot while it could be HK$38,000 to HK$HK$45,000 per square foot for apartments.”
Before the land sale, a 1,843 sq ft penthouse unit at Dynasty Villa, a 20-year-old low rise residential development in the nearby area of Beacon Hill, changed hands for HK$72 million, or HK$39,060 per sq ft, making it the most expensive per sq ft in Kowloon Tong, according to Midland Realty.
Sammy Po, chief executive of Midland Realty’s residential department, expects existing owners in Kowloon Tong to either raise prices or hold back from selling in view of the surge in land values.
“Home owners will definitely increase their sales price by 10 per cent to 20 per cent in response to the land sale outcome,” he said.
Hanson Construction Holdings raised the price for a 1,457 sq ft unit at its new development, Mount Vienna in Fo Tan, by HK$1 million to HK$46 million on Tuesday.
The site, which will yield a total area of 436,417 square feet, is at the junction of Lion Rock Tunnel Road and Lung Cheung Road.
The winning bid was in the lower range of the market expectation of between HK$10 billion and HK$16.6 billion, or HK$24,000 and HK$38,000 per square foot.
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It smashed the previous record for the highest land price per square foot in Kowloon set by a residential site on Lung Cheung Road on Beacon Hill measuring 235,182 sq ft. Kerry Properties won it for HK$7.3 billion, or HK$21,016 per square foot in October 2016.
“Supply of similar sites with that sort of size and environment for luxurious development is scarce,” said Chiu Kam- kuen, head of valuation and advisory services, Asia Pacific, at Cushman & Wakefield.
Thomas Lam, the head of valuation and consultancy at Knight Frank, expects the total investment cost for the project to be between HK$17 billion and HK$18 billion.
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Other bidders for the Kowloon Tong site included CK Asset Holdings, Kerry Properties, Henderson Land Development, K. Wah Group and a consortium comprising New World Development, China Overseas, Sino Land and Far East Consortium International.